Yes, when friendly fire is off incendiaries will not cause damage to your teammates. Yes this can be abused by players who are coordinating well enough.
In ye olde CS and CS: Source, a number of tactics on non-FF servers would crop up that took advantage of this. My favorite was placing one or two people at a door and then having the rest of the team nuke the area with grenades. The people at the door would then immediately breach while the grenades were going off. There was a pretty good chance you would catch the opposing team in mid-retreat, and the additional force from the breaching players would usually lock down the spot.
This isn't a big deal though, since non-FF servers are more for casual play. Nobody playing competitively would be on these servers anyway.